The present invention generally relates to computer-implemented knowledge-based systems. More particularly, the present invention relates to regulatory knowledge representation, regulatory knowledge utilization, and regulatory knowledge maintenance systems that use embedded regulatory knowledge as well as other types of knowledge to determine if corporate actions or other related events and actions comply with applicable external regulations, and/or with internal policies and procedures. The present invention uses the term “Regulatory Knowledge Base” to denote the structure, the key components, and the methods for development, utilization, and maintenance of the regulatory knowledge necessary for evaluation of actions and events for their compliance with applicable regulations, policies and procedures. Regulatory knowledge is defined here in a broad sense and it covers all the means necessary to control or regulate operations of a business entity.
The current capabilities of computer systems and computer networks promote the availability of rich information about actions and events involving people and computers. The low cost of storage and transmission of such information means that all of the details about those actions and events can be captured and analyzed. The events represent either a single action or multiple actions correlated to each other in certain ways. Those actions involve people or computers and represent, for instance; financial transactions, mouse clicks, selections and invocations of computer actions, or others.
Every contemporary enterprise operates because its employees or computer systems take actions. Those actions have to be guided by the knowledge of government (federal, state, county, city) regulations, industry regulations, internal policies or procedures, and various rules of the trade they represent. In order to assure that proper actions are taken, the enterprise must not only check compliance of those actions with the applicable regulations and policies, but must also assure that those actions follow guidelines aiming to optimize the enterprise performance.
One area in which compliance of corporate actions with the applicable regulations and policies is especially important is the financial arena. The tremendous volume of financial transactions necessitates automated inspection of preceding and following corporate actions and events to check for their compliance with legal requirements and to identify those that violate those requirements. Typical monitoring of such actions applies specific tests and combinations of tests to provide an early indication of the possibility of questionable activities. Such early indicators of questionable activities are later analyzed by groups of compliance analysts to determine which of them constitute true violations.
Currently, no system or method exists for explicit representation of the regulatory knowledge that would allow for direct transformation, representation, utilization, and maintenance of a variety of external regulations and internal policies governing operations of an enterprise. There is no system or method that would use natural language statements built from regulatory knowledge structures that on the one hand could be directly processed by a computer system, and on the other hand would be fully comprehend-able by humans who are not computer experts.
Therefore, a system, program, and a method are needed for representation, utilization, and maintenance of regulatory knowledge that could be directly and automatically used to evaluate corporate actions and events for their compliance with applicable regulations and policies.
In particular, a more specific need exists for such a knowledge representation structure and a system and a method for evaluation of actions and events that represent financial transactions and other activities of a financial services enterprise in order to ensure a full protection of the financial assets, assurance of the best services and products available to the customer, and the integrity of the financial markets. It should be noted, and recognized by those skilled in the art, that the Regulatory Knowledge Base system and method described in this embodiment are not limited to the financial services industry, and that the financial service industry applications are used only as examples to better illustrate the proposed invention.